Amidst warnings, bitcoin reaches new heights

(FinancialPress) —Bitcon has broken yet another psychological barrier, as it reached the $18,000 mark on the Bitstamp exchange on Friday. The new record-high came after a 9% gain in value, and is reached among ever-growing warnings of volatility and the speculative nature of the exchange instrument.

The 1,700% rise in the cryptocurrency during this year alone has made many financial industry stalwarts to raise their red flags in alarm – fearing a market bubble that could burst in devastating fashion.

In December alone, bitcoin‘s gained 80% on its own value for the prior month. This is its best month in percentage gains since December 2013.

Bitcoin‘s gained 20% on its value since Monday. Trading has slowed down considerably, though, thus pouring cold water on the heartstopping price swings it had been experiencing in the past few weeks. This can be attributed partially to the launch of bitcoin futures contracts from Cboe Global Markets on Sunday.

The rise in price could also be attributed to an identifiable factor – the launch of Cboe rival‘s CME Group‘s bitcoin futures contracts.

“The hope (is) that futures signal the unlocking of institutional money into the digital arena and (that there will be) a rapid demand increase and ratification of the technology and its principles,” said Charles Hayter, founder of industry website Cryptocompare.

Many people continue to cultivate fears when looking from the outside in towards the crypto market, though.

A joint study by Dublin City University, Trinity College Dublin and Anglia Ruskin University was revealed on Friday. It states that bitcoin could threaten the financial stability of traditional currencies and markets.

“Our evidence finds that the price of Bitcoin has been artificially inflated by speculative investment, putting it in a bubble,” said Larisa Yarovaya, one of the authors of the report.

“Although bitcoin is not regulated by governments, it could still have a knock-on effect on traditional markets due to the interconnectedness of cryptocurrency markets with other financial assets.”